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Question
If a point lies on the monetary policy reaction curve, and at this point the inflation rate equals the target rate of inflation, we know that:A. the real interest rate corresponding to this point is above the long-run real interest rate.
B. the real interest rate corresponding to this point is equal to the long-run real interest rate.
C. the real interest rate corresponding to this point is below the long-run real interest rate.
D. current output is above potential output.
Answer
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